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NEW YORK — Cosmopolitan Cosmetics — the cosmetics wing of German hair care giant Wella, which has amassed a $1.5 billion fragrance business — has raised its fashion profile another notch by forming a joint venture with Italian apparel powerhouse Max Mara.
Wella already has beauty licenses with Gucci, Anna Sui, Escada and Ellen Tracy. The Max Mara union is the third deal that Cosmopolitan Cosmetics has struck this year. In April, the company acquired Escada’s beauty business, which included the German fashion house’s beauty license and its AdiPar distribution business. In May, Wella’s Cosmopolitan formed a joint venture with Anthony Gill and Cristina Bornstein, the creators of the indie color house Tony and Tina.
Max Mara looks like a major opportunity. Industry sources estimate that Cosmopolitan could ultimately turn the fashion label into at least a $100 million beauty business.
Wella’s motives are obvious. “It’s the last big name that doesn’t have a fragrance yet,” said Werner Hofmann, senior vice president of Cosmopolitan. “It’s a very appealing fashion brand with a global distribution and it’s a serious family business.” He added that Max Mara has a global business of about $1 billion.
Luca Donnini, who heads the marketing and export division of Max Mara, said the Wella deal fits into Max Mara’s strategy of product development. The prospect of a joint venture, rather than a simple licensing deal, was attractive because it gave Max Mara more participation and control over a project that at least indirectly could affect the company’s image. A partnership in a new but related field would also aid the corporate evolution, he added.
Donnini is the vice president of the joint venture, called Max Mara Parfums SRL. Hofmann has the title of president. Cosmopolitan holds a 51 percent stake, giving it control, and Max Mara has the remaining 49 percent.
Industry sources estimate that the partners have contributed to a combined pot of $40 million to $50 million, which is roughly the size of the war chest that is needed to launch a fragrance globally with distribution around the world.
Hofmann refused to comment on the estimates, but he said the partners have agreed to launch the first product, a Max Mara women’s fragrance, in spring of 2004. He noted that color cosmetics is an added possibility. “[It is] a major fashion house that offers the potential for makeup,” Hofmann said. Donnini was more definite, saying that cosmetics was definitely in the future as “a second step,” noting that with Max Mara’s fashion image, fragrance is the logical place to start.
But men’s products are out of the question, since all of Max Mara’s more than 20 fashion brands are aimed at women. Within that sphere, the company does have the advantage of its own distribution. There are about 450 Max Mara shops around the world, Donnini said, about 30 percent of them owned by the company and the rest franchised.